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| Fig. 1: Colombia Coal Production and Uses. [2] (Image source: D. Sandoval) |
Coal is a cheap, readily available and energy-dense fuel, which makes it a central component for many energy systems around the world. Coal is also an input for providing heat and carbon for industrial processes. It is easy to acquire and the technology to use it is mature. However, the use of coal causes vast emissions of greenhouse gases (GHG) and particulate matter that is harmful to human health.
Coal currently plays a large role in the Colombian energy system and economy, contributing substantially to the nation's power generation, industrial activity, and export activities. While coal has played a crucial role in meeting energy demands, its use raises environmental concerns due to the release of greenhouse gases and other pollutants. In recent years, Colombia has actively explored strategies to balance its energy mix, incorporating cleaner and more sustainable alternatives while addressing the environmental impact associated with coal combustion.
Let us now work out some benchmark estimates for understanding the scale of coal production in Colombia and the impact that moving away from coal would have on economic activity, power generation and greenhouse gas emissions. These are not meant to provide an exhaustive analysis of each topic or offer recommendations for regulators or market players. We wish only to provide back-of-the-envelope estimates based on reliable data sources using simple analysis.
Colombia contains significant coal reserves, predominantly located in the Cesar and Guajira regions. The country's coal deposits primarily consist of bituminous and sub-bituminous coal, characterized by varying carbon content and calorific values. Gomez et al. find the heat content for coal reserves around the country ranges from 16 to 32 MJ/kg. We will use an average heat content of 24 MJ/kg for remaining coal reserves in Colombia. [1] As of 2020, the country had proven reserves of 4554 million tonnes of coal. [2] This would correspond to 109 exajoules of energy under the national heat content assumed.
Colombia is not a large coal producer at the global level. In 2021, the latest available year, the country produced 1.71 exajoules of coal; this constitutes only 1.02% of global coal production that year. However, Colombia typically exports 80%-90% of its yearly coal production, making it a major coal exporter; the 5th largest for the year 2021. [2]
Fig. 1 shows coal production, domestic consumption and exports for the last decade. It shows how Colombia maintained relatively flat production and consistently exported most coal produced. As mentioned before, recent policy changes have led to lower levels of production for 2020 and 2021. For both years, the country also maintained a coal deficit, meaning the country drew from stored coal reserves.
Let us now estimate the value of coal reserves and production in Colombia. Coal is a traded commodity and its price therefore fluctuates over time. It is impossible to know at what price Colombia's coal could be traded in the future; but we shall use the average traded price in 2021 as a simplified measure.
We consider the weighted average of coal price indexes as shown in Table 1. The table does the following:
Takes price indexes in the US, China, Japan and Northwest Europe,
Homogenizes the price indexes by dividing each index by its listed energy content base,
Lists each price index on a per-unit-of-energy basis,
Assigns weight to each index according to the percentage of Colombian coal exports sent to countries that are geographically closest to the location for each index,
Calculates the weighted average price for Colombian coal exports.
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| Table 1: Price indexes and weights. [2] The weighted average price is $4.25 × 109 EJ-1. |
We arrive at an average price of $4.25 billion per EJ of coal. Assuming Colombia continued exporting coal at the 2021 rate of 1.73 EJ a year, the yearly export value would be $7.4 billion per year. Total proven reserves of 109 EJ would be worth $464 billion.
Coal is also an important government revenue source. The government charges a 5-10% royalty (regalías, in Spanish) on coal production, depending on the scale of mining operations. [3] To estimate potential royalties available from coal, we shall use an estimate of 8.5%, assuming most production would likely be large-scale and therefore skew towards the higher 10% royalty for larger operations. With the total market value estimated above, the potential royalties the government could receive from the $464 billion value of reserves would be $39.5 billion.
As mentioned above, these estimates are based on 2021 prices. If Colombia continued coal production, prices would be subject to market changes that can change values drastically; but these estimates provide a helpful measure of coal's market value at current prices.
Let us now estimate the measures needed to move away from coal production if Colombia were to stop using coal. What would be the scale of infrastructure needed to meet the needs that coal currently fulfills? This is a stylized scenario meant to provide a helpful measure—not a recommendation for near-term action.
Coal has many uses, from power production to heating to industrial activities. However, as a simplifying measure, we shall assume that all coal is burned in an average power plant to produce electricity. We then estimate the amount of renewable generation infrastructure needed to produce the same amount of electricity.
Singh et al. find coal plants have heat rates of 10,200 to 10,800 kJ/kWh. [4] We will use an estimate for an average power plant with a heat rate of 10,600 kJ/kWh. This corresponds to an energy conversion efficiency of 33.96%.
If all 0.13 exajoules of Colombian domestic coal consumption in 2021 were used in this average power plant, the plant would produce 12.3 TWh. [2]
| 0.3396 × 0.13 × 1018
J 3600 J Wh-1 |
= | 1.23 × 1013 Wh | = | 12.3 TWh |
Next, we estimate the generation infrastructure needed to produce this energy. A power plant active all 8760 hours a year would require a capacity of 1.4 GW. Table 2 calculates the capacity required to generate 12.3 TWh using hydropower, wind, and solar generation, accounting for the average capacity factor for each technology.
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| Table 2: Capacity factors and estimated required capacity for renewable sources. [5] |
This is a tremendous amount of infrastructure. For reference, the Colombian power system only has an installed capacity of 17.5 GW, meaning that the current system's capacity would need to grow by 19-73% depending on the technology employed in order to supplant coal use. [6] This constitutes a significant system-level change, though not insurmountable.
Colombia has invested extensively in hydropower energy and it has become difficult to continue expanding hydropower generation cost-effectively. However, solar and wind deployments are still in their early stages. An interesting area for further research could be identifying potential future limits on renewable energy expansion in Colombia and whether 12.76 GW of solar or 6.38 GW of wind would be feasible given resource availability and gird constraints.
Of course, not all coal is currently used for power generation, but this is still an informative number for understanding the magnitude of the challenge of fully moving away from coal. Coal used for energy would need to be replaced with another energy source and currently viable zero-emission technologies all produce electric power. Another caveat is that coal use in industrial applications will likely be less efficient than that of power plants; coal only represents a small, easy-to-ignore fraction of a factory's expenses while it is the main input of a power plant. Using a power plant's heat rate as a benchmark might be an overestimate, but likely within one order of magnitude.
Another issue to consider is power reliability. In Colombia, coal-fired power plants contribute significantly to grid reliability. This is especially valuable given the country's high level of hydropower generation, which can drop unpredictably, especially in years when the El Niño weather phenomenon is intense. The Colombian grid will need large, consistently available, and quickly dispatchable energy sources as it continues to adopt renewable energy. Coal and other fossil fuels currently serve the role of providing reliability. In the future, the costs and specifications of utility-scale batteries may allow them to serve a similar role, but this analysis falls out of the scope of this paper.
Let us now estimate the potential greenhouse gas emissions of Colombia's coal production and reserves.
We use the average global coal power plant emission factor of 1.13 kg CO2-eq/kWh of output power estimated in Oberschlep et al. [7] Most of this factor corresponds to power plant CO2 emissions, though about 5% corresponds to methane leaks from coal mines and <1% from transport and other supply chain activities. We convert this 1.13 kg CO2-eq/kWh of output power to 1.046 × 10-4 kg CO2-eq/kJ of input coal energy, using the heat rate of 10,600 kJ/kWh used in the previous section.
Under this emissions factor, Colombia's domestic coal consumption of 0.13 exajoules of coal in 2021 would correspond to emissions of 1.36 × 107 tonnes CO2-eq. For scale, this is 4.5% of the 3.03 × 108 tonnes CO2 national emissions that Colombia reported to 2018 (in the latest available report to the United Nations Framework Convention on Climate Change—UNFCCC). [8] This makes it an important factor to abating the country's climate footprint, but far from the only area that requires addressing.
Colombia's reserves of 109 exajoules can emit 1.143 × 1010 tonnes CO2-eq if mined and burned. The country's initiatives to reduce production may help abate some of these emissions, but it is important to note that coal is not a scarce resource under current market conditions. Global coal demand can find sources to replace Colombian supply. This may change as global emission standards and market conditions change, but for now, unilateral action from Colombia will not result in fully abating 1.143 × 1010 tons CO2-eq in emissions.
As a final note, the negative impact of coal is not limited to climate; coal burning produces particulate matter that has a hazardous effect on human health. The impact varies greatly depending on the sulfur content of coal, plant design and the location of coal plants. Estimates for the impact in different countries vary across three orders of magnitude, but can reach up to 7.5 × 10-6 Disability-Adjusted Lifetime Years per kWh of coal generation. [7] Estimates for Colombia are not available and fall outside the scope of this work.
Coal exports in Colombia constitute an industry of over $4 billion a year and coal royalties are a substantial source of government revenue.
Replacing all coal use in Colombia with renewable power generation would require a the current system capacity to grow by 19-73%. This constitutes a system-level change. The power system would also need to find alternatives for providing reliability. Replacing coal therefore constitutes a substantial challenge that can be faced with existing technologies.
However, moving away from coal can reduce Colombia's national carbon footprint by about 5%. Colombia can also influence the global market by curbing its export supply, but the effect of doing so will likely be diminished if Colombia's efforts are unilateral.
© Daniel Sandoval. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] O. P. Gómez Rojas et al., "Petrographic Characterization, Variations in Chemistry, and Paleoenvironmental Interpretation of Colombian Coals," Int. J. Coal Geol. 227, 103516 (2020).
[2] "BP Statistical Review of World Energy," British Petroleum, 2021, 2022.
[3] "Ley 141 de 1994 Congreso de la República de Colombia," Diario Oficial de la República de Colombia, Issue 6, pp. 1, Art. 16 (1994).
[4] M. S. J. Singh et al., "Heat Rate Deviation Analysis of a Coal-Fired Power Plant (CFPP) with the Influence of Applicable Coal Prices (ACP)," Pertanika J. Sci.Technol. 31, 1453 (2023).
[5] N. Bolson, P. Prieto, and T. Patzek, "Capacity Factors For Electrical Power Generation From Renewable and Nonrenewable Sources," Proc. Natl. Acad. Sci. (USA) 119, e2205429119 (2022).
[6] S. Zapata et al., "Renewables For Supporting Supply Adequacy in Colombia," Energy 239, 122157 (2022).
[7] C. Oberschelp et al., "Global Emission Hotspots of Coal Power Generation," Nat. Sustain. 2, 113 (2019).
[8] "En Colombia, Emisiones Asociadas a Cambio Climtico Crecieron 17% Entre 2014 y 2018," El Espectador, 18 May 22.